The number of people and the number of dollars involved with on-line purchasing is increasing at a rapid pace. Typically, customers use a traditional credit card number to pay for goods and services purchased on-line. However, traditional credit card purchases in an on-line environment have certain drawbacks.
First, not everyone has a traditional credit card number to use on-line. Applying for a credit card often involves several cumbersome steps including obtaining a form, mailing the form, and waiting several days for a credit card number. This process discourages many people from making spur of the moment purchases.
In addition, on-line credit card use raises a number of security issues. If someone discovers a user's credit card number, the user may be liable for a certain amount of wrongful purchases, and he is faced with the inconvenience of canceling the credit card and obtaining a new credit card. The credit card issuer is also burdened by a compromised credit card number. The issuer is typically liable for the majority of the wrongful purchases, and the issuer's overhead increases when cards must be reissued.